update/AAU Carbon Permits May Plunge Next Year, AES Says


AAU Carbon Permits May Plunge Next Year, AES Says (Update1)
2010-11-11 14:21:52.578 GMT

(Adds further comment in penultimate paragraph.)

By Mathew Carr
Nov. 11 (Bloomberg) -- The price of Assigned Amount Units
may plunge next year as nations with surpluses scramble to sell
the emission permits, said an official at AES Corp., the U.S.
power producer with operations in 29 countries.
Prices of the allowances known as AAUs, given to developed
nations with targets under the 1997 Kyoto Protocol, may drop to
a range of 3 euros to 6 euros ($4.13-$8.26) a metric ton next
year from current prices around 7 euros to 9 euros, said David
Ungar, managing director of Virginia-based AES's European and
African climate solutions unit.
"There's going to be a declining trend," Ungar said in an
interview yesterday at the Climate Finance 2010 conference in
Nations may get the opportunity to sell without seeking to
use the funds for environmental projects because they got
generous limits in the 1990s to entice them into the program, he
said. Similarly, during the true-up period through 2015 when
nations make sure their actual emissions match their targets,
buyers may explore the possibility of buying AAUs that aren't
linked with green investment schemes, he said.
There may be 9 billion metric tons of spare AAUs in the five
years through 2012, the period with Kyoto targets, he said.

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--Editors: Stephen Voss, Mike Anderson.

To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or

To contact the editor responsible for this story:
Stephen Voss on +44-20-7073-3520 or